IPSAS 33
Active
First-time Adoption of Accrual Basis IPSAS
Guides a first-time adopter in preparing its statement of financial position on transition to the accrual basis of financial reporting under IPSAS – using deemed-cost as the core transitional tool, three-year transitional relief for assets, liabilities, revenue and transfer expenses, and specific exemptions that do not affect fair presentation. Effective 1 January 2017. (IFRS 1 equivalent, adapted for the public sector.)
Active Standard
IPSAS 33 First-time Adoption of Accrual Basis IPSAS is the current, active standard issued by the IPSASB to guide first-time adopters onto the accrual basis – using deemed cost as the core transitional tool with three-year relief. Effective for periods beginning on or after 1 January 2017 (earlier application encouraged). Paras. 1–70.
IPSAS 33 is the IPSASB's adaptation of IFRS 1 First-time Adoption for the public sector – but where IFRS 1 permits full retrospective restatement, IPSAS 33 builds a SEPARATE opening statement of financial position using deemed cost and offers a distinctive three-year relief period.
1
Objective, Scope & Out-of-Scope Circumstances (paras. 1–6)
A bridge, not a permanent home (para. 1)
Guides a FIRST-TIME ADOPTER preparing its statement of financial position on transition to accrual-basis IPSAS – aiming for high-quality, transparent information that is (a) representative and (b) comparable to prior-period cash-basis / mixed-basis reporting.
Key definitions
First-time adopter
An entity that presents its first accrual-basis general purpose financial statements.
Deemed cost
Monetary amount used to recognise an asset on transition where cost is unknown or unreliable.
Out of scope
ExcludedInstead, see…
Switch from one IPSAS version to anotherNormal amendment process
Change to a different public-sector frameworkIPSAS 33 still applies (first-time to accrual)
2
Key Definitions (para. 9)
Core definitions (para. 9)
Deemed cost; first-time adopter; date of transition to accrual basis; reporting period. The date of transition is the START of the earliest period for which the entity presents full accrual-basis comparatives.
Date of transitionReporting periodDeemed cost basis
3
The Opening Statement of Financial Position (paras. 15–19)
Opening SOFP (para. 15)
The entity RECONSTRUCTS its opening accrual-basis statement of financial position from existing information (books/records, valuations, market data) – it is NOT required to restate prior-period profit/loss line-by-line, but assets and liabilities are recognised, measured and disclosed per IPSAS on the opening date.
Two paths: (a) build from cost where known; (b) fall back to deemed cost where cost/history is unavailable.
4
General Recognition & Accounting Policy Principles (paras. 20–23)
Same rules, new books (para. 20)
All IPSAS recognition/measurement requirements apply at the opening date, but the entity is exempt from the 'no hindsight' and 'use prevailing rates' restrictions that bind continuous adopters – it may use hindsight of events after the reporting period to estimate, and may use current market data.
Full IPSAS recognition appliesHindsight permittedCurrent market data allowedPrior cash-basis info used to rebuild
5
Three-Year Transitional Relief – Assets & Liabilities (paras. 33–41B)
Phased-in measurement (para. 33)
YearRelief
Year 1Deemed cost for assets; FV less costs to sell allowed
Year 2Same; plus revaluation to FV permitted
Year 3Full accrual-basis measurement required
Relief is OPTIONAL – the entity may apply full accrual measurement from year 1.
6
Three-Year Relief – Revenue & Transfer Expenses, Plus Consequential Exemptions (paras. 42–48)
Revenue transition (para. 42)
For revenue, the entity may use its cash-basis / mixed-basis records for the first three years and adjust to accrual-basis timing, with a disclosure of the adjustments. Consequent exemptions (e.g. from hedge-accounting documentation) apply only to the transition period.
Transfer expenses
Expenditure that gives rise to an asset or reduces a liability – the accrual analogue of cash-basis outlays.
7
Deemed Cost – the Core Transitional Tool (paras. 64–70)
Fallback measure (para. 64)
Where the historical cost of an asset cannot be determined reliably, the entity measures it at DEEMED COST – its fair value on the date of transition, adjusted for accumulated depreciation and impairment recognised subsequently. This is the single most-used transition tool.
Deemed cost is not 'fair value' forever – subsequent measurement follows the asset's IPSAS model.
8
Deemed Cost – Specific Applications (paras. 64A, 67–75)
Tailored uses (para. 64A)
Deemed cost also applies to biological assets (IPSAS 27), intangible heritage assets (IPSAS 31) and investment property (IPSAS 16) where reliable cost records do not exist. The entity may use an independent valuation at the date of transition.
Asset classDeemed-cost basis
Biological / heritageFV at transition date
Investment propertyCost or FV (entity election)
9
Exemptions That Do NOT Affect Fair Presentation (paras. 63, 153)
Allowed shortcuts (para. 63)
The transitional exemptions – deemed cost, three-year relief, hindsight, and the cash-basis revenue carve-out – are designed NOT to affect the entity's fair presentation when applied. Disclose the exemptions used and the resulting impact.
Deemed costThree-year reliefHindsight permittedImpact disclosed
10
Disclosure During the Period of Transition (paras. 151–152F)
Reconciliations (para. 151)
Reconcile, for each major class of asset/liability: (a) the previous (cash/mixed-basis) carrying amount to the accrual-basis opening carrying amount, and (b) the opening accrual-basis amount to the close. Disclose the exemptions taken and their quantitative effect.
A sensitivity to FV changes must also be disclosed where the entity elected FV as deemed cost.
11
Worked Example – Deemed Cost of Investment Property
Illustrative (IG39)
StepAction
1. Determine date of transitionStart of earliest comparative period
2. Build from recordsUse cost where available
3. Apply deemed costFV less depreciation on unknown-cost assets
4. ReconcilePrior basis → accrual basis, disclose gap
12
Effective Date & Amendment Timeline (paras. 153–154Q)
Timeline
DateEvent
Jan 2015Issued
1 Jan 2017Effective date
2025Amended (latest)
The IPSASB may extend the transition relief period via consequential amendments; check the latest Handbook edition.
13
Relationship to IAS/IFRS – Comparison with IFRS 1
Divergence (para. 155)
IPSAS 33 keeps IFRS 1's 'reconstruct the opening SOFP' objective but diverges sharply: it ALLOWS deemed cost and a 3-year measurement relief, and uses the public-sector 'service potential' language; IFRS 1 requires full retrospective restatement throughout.
IFRS 1 deemed costIPSAS 33 core tool (allowed)IFRS 1 3-year reliefIPSAS 33 distinctive
14
Statement / Process Mapping
Where it flows
ProcessLedger
Transition projectImplementation Team → Opening SOFP workbook
Asset valuationsFA Valuation → Asset Register (deemed cost)
Prior-period bridgeDisclosure Engine → IPSAS 7200
15
Related Standards – Cross-Reference Map
See also
StandardRelation
IPSAS 16Investment property deemed-cost rules
IPSAS 31Heritage/intangible deemed cost
IPSAS 31Intangible deemed cost
IFRS 1Conceptual twin
16
Quick-Reference Glossary
First-time adopter
Entity presenting its first accrual-basis GPF statements.
Date of transition
Start of the earliest accrual-basis comparative period.
Deemed cost
Fallback FV-based measure when cost is unavailable.
Three-year relief
Optional phased measurement for assets/liabilities/revenue.
Hindsight
Permitted use of post-period information to estimate opening amounts.
Fair presentation
Exemptions must not compromise faithful representation.